Jobs vs. taxes

Sunday

Once Amazon opens for business, that means residents who purchase items from it will have to add the state’s 6 percent sales tax to the order.

The good news: Florida’s economy may be getting a significant boost with the addition of thousands of new jobs and hundreds of millions of dollars in capital investment.

The bad news: You may be paying more in taxes because of it.

Gov. Rick Scott announced Thursday that online retail giant Amazon had agreed to expand its operations to Florida. That could include a 1-million-square-foot warehouse near Tampa and distribution centers elsewhere in the state (West Bay, anyone?). That $300 million investment is expected to generate 3,000 jobs.

But once Amazon opens for business, that means residents who purchase items from it will have to add the state’s 6 percent sales tax to the order.

They’re supposed to do that already with any Internet sale, but very few do, and the state has no way to force retailers to collect sales taxes across state lines. That’s because a 1992 Supreme Court decision (which in those nascent days of the Internet applied more to catalog sales) prohibits states from collecting such taxes unless the retailer has a “physical presence” in the state. Florida legislators and Congress have failed repeatedly to pass a law giving state officials that authority.

Supporters of online sales tax collections have framed it as an issue of economic fairness (hence the name of the latest federal legislation, the “Marketplace Fairness Act”). They argue that brick-and-mortar businesses are losing sales to the Internet because online shoppers don’t have to pay the sales taxes. However, people buy online not to escape sales tax, but to acquire items they can’t find locally, or which they can find much cheaper even if the sales tax were added to the price.

Also, the pro-sales tax crowd ignores the fact that brick-and-mortar businesses draw from the local infrastructure (roads, water, etc.) to operate; out-of-state businesses don’t. Why should a retailer in Seattle help pay for services in Orlando? What’s “fair” about that?

That issue would become moot, though, if Amazon sets up shop here. Its “physical presence” would require it to collect the sales tax on every Floridian’s purchase.

And that would constitute a de facto tax increase on consumers.

That’s the reason why Gov. Scott, as recently as last month, opposed using state economic incentives to lure Amazon here. Thursday, though, a spokeswoman for the governor said the deal was not a reversal of Scott’s earlier stance but a “culmination of ongoing discussions.” You can call a flip-flop a backless sandal if you want, but it still won’t give you sufficient coverage when Floridians find out they’re paying more to buy that item from Amazon. No matter how much Scott touts it, the benefit to Florida’s economy from those 3,000 jobs won’t be felt nearly as directly as that additional 6 percent from your wallet. The man who entered office promising to be the “jobs governor” could face re-election in 2014 as the guy who is going to raise your sales taxes.

That is, unless the Legislature levels the field for him.

Scott previously has said he would like any online sales tax deal to be revenue-neutral, meaning the increase in sales taxes would be offset by reductions in other state taxes and fees. Officials have estimated the Amazon deal could pump $45 million to $90 million in sales tax revenues into state coffers.

Getting enough lawmakers to agree on how to achieve that zero-sum balance has been an obstacle to previous attempts to pass an online sales tax bill. Lucky for Scott, the Legislature has time to work on it: The state doesn’t have to collect the sales taxes from Amazon until the retailer begins operations in Florida, which could be 2016.

Florida and Amazon still have to work out the details of the economic incentives to ensure the company will come here. That’s likely to be a lot easier to accomplish than solving the sales tax issue.

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